Safe and Sound

The Ohio Valley Bank Company

Gallipolis, OH
4
Star Rating
The Ohio Valley Bank Company is an FDIC-insured bank founded in 1872 and currently headquartered in Gallipolis, OH. Regulatory filings show the bank having equity of $107.7 million on $1.01 billion in assets, as of December 31, 2017.

Thanks to the work of 275 full-time employees in 17 offices in multiple states, the bank holds loans and leases worth $750.3 million, $540.1 million of which are for real estate. U.S. bank customers currently have $860.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Ohio Valley Bank Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three major criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for depositors when a bank is experiencing financial instability. Therefore, a bank's level of capital is an essential measurement of a bank's financial resilience. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, The Ohio Valley Bank Company received a score of 10 out of a possible 30 points, below the national average of 13.13.

One important measure of this buffer is a bank's Tier 1 capital ratio. The Ohio Valley Bank Company's Tier 1 capital ratio was 14.32 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial downturns.

Overall, The Ohio Valley Bank Company held equity amounting to 10.65 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with lots of these types of assets could eventually be required to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, pushing down earnings and increasing the chances of a future failure.

The Ohio Valley Bank Company scored 36 out of a possible 40 points on Bankrate's test of asset quality, less than the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 1.37 percent of The Ohio Valley Bank Company's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . That reserve's size can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on The Ohio Valley Bank Company's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

The Ohio Valley Bank Company underperformed the average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One important measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for The Ohio Valley Bank Company was 5.96 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $6.4 million on total equity of $107.7 million. The bank had an annualized return on average assets, or ROA, of 0.65 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.